What started the financial crisis in Greece?

The Greek financial crisis has been one of the most important stories of the summer, but it’s also one of the most complicated. How did they end up in such crippling debt? Why did the European Union offer a deal to Greece that doesn’t offer a way for them to restructure their debt? And how are the people in Greece handling the ongoing problem...and what happens next?

TheBlaze's Dan Andros and Jason Buttrill explained the crisis on Wednesday's Glenn Beck Program:

Below is a rough transcript of this segment:

Dan: Hey, Dan Andros here, head writer for TheBlaze, along with Jason Buttrill, chief researcher here at TheBlaze. Greece is just a big, fat mess, and so we’re just going to go through and try to explain it for you really quick. Basically here’s the situation, Greece defaulted. We all saw that in a news, and they went to go vote on an austerity bailout package, and they voted against it. They wanted to keep their goodies, and they didn’t want anything to do with that, so they voted against it. The Greek PM goes back in and ends up taking a deal, so now everyone’s kind of scratching their heads, they don’t really understand what’s going on. So, we’re going to go through and try to explain it in just a quick couple steps. First step, easy way to understand it, the 2008 subprime crisis.

Jason: 2008 subprime mortgage crisis is basically what kicked off this global financial pandemic. During the subprime mortgage crisis, we had irresponsible lenders and irresponsible borrowers, so basically you had people applying for loans that had no business applying for those loans, but the lenders had no business even issuing those loans in the first place. They were loans that eventually since they had adjustable rates, they were going to continue to go up and up and up, so these people had no chance of ever paying these loans off.

Dan: Right, and they didn’t care. They saw the quick buck, so they didn’t care. They just went for it.

Jason: Exactly, and the lenders saw dollar signs and dollar signs that were going to continue to come and continue to come, and if they didn’t, they would just go bankrupt anyway. Back in 2010, during the first bailout, Greece had a national debt of 130% more than their GDP. Put that into perspective. So, let’s say you are making $2000 a month. Now, what if you had bills that were more than 2000 a month? There’s no way you’d qualify for a loan. No lender in their right mind would grant you a loan, but the EU and the IMF granted those loans to Greece.

Dan: And they had no chance of paying it back.

Jason: They had no chance of paying that back. So, basically Greece was that 2008 loan applicant that wanted something so badly that they didn’t care about what the ramifications were down the line. They figured we’ll get around to it later. The EU were those irresponsible lenders that were willing to make that loan because they knew that there was no chance that person would ever be able to get out of debt.

Dan: So, they signed this debt deal, so what does this thing actually do?

Jason: Basically he went completely reverse on what he asked his people to do. He asked his people to forget the deal, the austerity deals, to begin with and to move forward so he could upend the system so they could eventually leave the euro and leave the European Union altogether. He made this deal that fully gave up controls to their banks, fully gave up control. Now, specifically Germans, but members of the EU, they can make decisions on whether to close banks, whether to grant loans, how to adjust their interest rates, everything. They make all of those calls basically from Berlin.

Dan: So, basically what’s happened here is they’ve lost a choose chunk of sovereignty. Basically Germany is their daddy, and they get to do whatever they want to do to them. So, they know they can’t pay off this debt. They know they can’t pay it off, so all it’s about is control.

Jason: They’ve lost the ability to say how do we run our government? They could actually tell them we don’t like how you use the Parthenon and how you tie that to the government with tourism. We want to own that’s, so actually we’re privatizing that and taking it over. Imagine the Parthenon being owned by a German company from Berlin. That is now completely possible, and the Greeks can’t say a thing about it.

Greece is now on the verge of becoming a straight up occupied country, occupied by the European Union. Talk about never being able to repay this debt, the IMF straight up came out and said that there’s no way the Greeks will ever be able to pay off this debt. They can’t do it. So, if they continue along these current lines, they’ll never be able to pay it off. The only way they said is if they restructure the deal, but they didn’t restructure the deal. That was not a part of this new deal that the Greek Prime Minister agreed to. Restructuring was not in it.

The only way they can do it is if they restructure it, so why would the European Union offer a deal basically that doesn’t give them an out, that doesn’t give them a way to eventually pay off their debt? Just like we said, it’s all about control. It’s all about the EU, German, more specifically, tentacles going further and further into some of these countries, countries that cannot pay off their debts, and now they’re occupied.

Dan: So, how do the people there in Greece feel about it? I think what many here in the states don’t understand is the mentality of the people in Greece. I mean, they just had an election, and the people they voted in, you hear often that it’s austerity and that it’s these right-wingers, but they’re not really right-wingers at all.

Jason: The people of Greece, the way they feel about it is they’re tired of it. Now, again, as we’ve said, they’re just as at fault as the EU is, the people that they’re blaming on this. But they wanted to upend the system, so what did they do? They went and voted in a party, the Syriza Party, that they thought was going to upend that system, that was finally going to say no more, we’re not going to go along with what the EU wants anymore, we’re going to do our own thing. So, they voted in the Syriza Party. Who exactly is the Syriza Party? Who did they give the mandate to do this?

They’re all malice. They’re Marxist-Leninists. They’re communists. They knew they voted in the people that had the ability and had the same mentality that was going to start a revolution, and it’s all about revolution. Since the days of the Soviet Union, that’s always been the goal of this type of government is to start a revolution here, and from there it’s going to spread like wildfire. We’ve actually seen that tinder spreading through the rest of the EU.

Dan: So, now we’ve got a bunch of revolutionaries here in power, and this is like their dream scenario. They’re hoping to get out of there, abandon their debts, and basically hit the restart button.

Jason: And that has huge consequences. If the rest of Europe all of a sudden has a restart button and they can just have all of their debt restructured, what does that say to the lenders? What does that do to basically Germany? What does that say to countries like that? They’re now stuck with all of these unpaid debts.

Now that these countries are considering departing from the EU, will we see a rebirth of nationalism? That’s what the European Union was formed to get away from, but now that that’s all coming down and the dominoes are about to start falling and more and more countries are going to look for that same out that Greece is now about to take, will we see a rebirth of nationalism? Will the old days of Europe, the 1930s era of Europe, will that suddenly become our reality?

Dan: Only time will tell, but as the times get tougher and people’s backs get pushed up against the wall, we’re going to see the answer sooner than later.

Featured Image: The Euro logo is pictured in front of the former headquarter of the European Central Bank (ECB) in Frankfurt am Main, western Germany, on July 20, 2015 as Greece has begun making a 4.2 billion euro ($4.6 billion) payment due to the ECB as well as outstanding sums due to the International Monetary Fund (IMF) according to a ministerial source. The transfer was made possible by a short-term "bridge" loan of 7.16 billion euros granted by the European Union on July 17, 2015. Photo credit should read DANIEL ROLAND/AFP/Getty Images

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